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Simulating the market: An interview with Ashok Atluri, Managing Director, Zen Technologies

Saurav Jha http://@SJha1618

Updated: March 9, 2015, 11:02 PM IST
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Geek at Large as always is committed to covering Indian companies that have made a mark in the defence sector through a focus on indigenous design and development. Today we talk to Ashok Atluri, Managing Director, Zen Technologies, a company that is today a force to reckon with in India's military simulation market having supplied to the military and police a range of ground forces simulators including involved solutions such as driving and gunnery simulators for both the T-72 and T-90, anti tank guided missile simulators and artillery forward control simulators. Overall, Zen has till date supplied just under 500 simulators to to mostly domestic customers.

1. Tell us how Zen Technologies came to be. How did it start and how did it grow? What are its key products?

Zen, since 1993, has been in the business of providing simulator solutions. We always wanted to create world-class products that would serve the real needs of our target customers - the Indian Armed Forces and Police forces involved in homeland security. In fact our journey began when we were approached by a special problem that the Police had at the time - lack of practice due to non-availability of ranges and ammunition. It was then that the co-founders of Zen, Kishore Dutt and Ravi Kumar conceived the idea of completely designing, developing and making in India its first Small Arms Training Simulator (SATS). Even then for the first three years making the customer buy the simulator took quite a bit of effort. While they liked the product based on what was demonstrated, they would ask for references from buyers and we had none to give since SATS hadn't obviously yet been sold to anyone! Typical,chicken-and-egg situation. Finally, we installed a system in the National Police Academy for training purposes as we felt it would expose the system to several potential customers. Using that as a 'reference' Delhi Police bought the first system from us. For almost 8 years we had only one product and it was then that we started launching some more products including 6-DoF (degrees of freedom) motion platform based vehicle simulators. Today we have more than 30 distinct simulation products including tank simulators, simfire armored combat training simulator, UAV simulator, small arms simulators, smart target systems (LOMAH - location of miss and hit), grenade simulators, mortar sim, medium machine gun sim, grenade launcher sim, etc. More significantly, we are now offering complete solutions by way of a Combat Training Centre (CTC) which will take care of training needs from the individual level all the way up to group combat situations including war like scenarios. Zen Technologies also showcased some of our capabilities relevant to the aviation simulation segment at Aero India 2015 recently.

2. How much of your technology is home grown and how much of it has been acquired via foreign collaboration?

100% of our technology is developed in-house for land forces simulators - and that constitutes almost 100% of our revenues as of today. R&D plays a crucial role when it comes to developing cutting edge defence simulators, therefore to keep our R&D division ahead of the technology curve as it were, we invest a significant part of our revenue into R&D. For example, last year out of a turnover of about Rs 46 crore, we invested about Rs 20 crore on R&D. Additionally out of 245 employees; about 97 employees work in the R&D department, i.e., 40% of 'Zenists' are dedicated to R&D - reflecting the importance we give to R&D. For us product development is a continuous process and R&D helps us in improving our product portfolio. Zen also has an impressive list of patents granted and pending. Furthermore the company's R&D Unit has been recognized & accredited by the Department of Scientific and Industrial Research, Ministry of Science & Technology, Government of India since a1998.

We recently also signed a MoU with Rockwell Collins to collaborate in the flight simulation vertical. The alliance will enhance our product portfolio while providing us access to new markets and technology. Zen will contribute through indigenous innovation in both software and hardware to provide Indian customers with highly customised aviation simulation solutions. Additionally, Rockwell Collins will explore the possibility of using its worldwide footprint to offer Zen's state of the art simulators and other training equipment to the global market.

3. What were some of the challenges in developing home grown offerings? Do you think India's current procurement policies do not give enough weightage to homegrown technology wherein the IP resides in India?

It is a fact that developing a product only for one customer is a great risk. However Zen took a conscious decision as far back as 1993 to support the defence preparedness of India by proactively investing in R&D.
As of now, under Buy Indian category, if there is a company with 100% indigenous content, it is not given any preference over a company that has "value added" 30% in collaboration with a foreign company. The value added in such collaborations is typically very minimal and cosmetic. With such lop sided policies it is hardly surprising that the desired level of indigenization has not taken place in defence. This has to change.

It is vital to highlight the difference between 'Make in India' and 'Designed, Developed and Made in India'; we should aspire for the latter in defence. More than just manufacturing products in India on a TOT basis we should rather encourage and incentivize indigenous companies to develop similar products and then give them preference during the procurement process. The next logical step should be to create a 'most preferred' category called "Buy Indian with Indigenous Design" with at least 75% indigenous content - this step will in turn unleash rapid indigenization of defence technology in India.

Having said that, in the past few months we have seen a major shift in the attitude of the procurement machinery with orders being cleared rapidly. In fact given the inclination of the Government today, we expect preference for indigenously designed and developed systems to be articulated very soon.

4. As a modest sized company looking to grow further in the defence space, what are your expectations on the policy front?

India's Defence Procurement Procedure (DPP) needs to reflect a political thrust towards enhancing domestic procurement and boosting purchase of equipment from indigenously designed and developed sources. A few Large Defence Industrial Houses may have benefitted from the efforts of the Ministry of Defence (MoD), but overall benefit to Indian defence Industry is still elusive. Some suggestions are given below:

In addition to the five categories given in the DPP (Buy Indian, Buy & Make Indian, Make, Buy & Make with TOT, Buy Global), MoD may consider having a sixth one as "Buy Indian with Indigenous Design" wherein request for proposals (RFPs) are issued only to Indian vendors with indigenous design and the indigenous content pegged at a minimum of 75%. This will provide incentives to Indian companies to invest in R&D and develop niche technologies and indigenous products.

If in a 'Buy Indian' or a 'Buy Global' Procurement an Indian company, with indigenous design and with at least 75% indigenous content, clears the trials successfully but is not L1, the order should be split 50:50 with L1, provided the Indian company matches the price of L1. In case, there is more than one Indian company fulfilling such criteria, then the company with the maximum indigenous content shall be allowed to match the L1 bidder. This will encourage everyone to bring to trials equipment with higher indigenous content and we will achieve our goal of self-reliance faster.

5. How do you see the military simulation market in India evolving over the next decade or so?
The use of simulators as a training and operational readiness tool in the Indian military has risen considerably since the 2000s. Today, simulator use in the Indian armed forces has expanded far beyond traditional aggregate/constructive simulation for war-gaming purposes to virtual solutions tailored to providing individual and collective driving, flight, gunnery and sensor training.

The Indian defence training and simulation market can be broadly segmented into: Land-based training and simulation, Flight/Air based training and simulation and Naval/Sea based training and simulation- Out of these, flight/air training and simulation market is projected to account for the highest proportion of expenditure in the Indian defence simulator market, followed by land-based and maritime simulation markets.

Among the major factors driving the Indian Military training and simulation market are the cost/safety/time benefits of using simulators for training and the modernization programs of the Military and Police forces.

Additionally given the lack of firing ranges in the country, simulator-based training is one part of the answer to maintaining unit-readiness levels. However, cost of ammunition, range availability, and lack of immediate feedback mechanism in regular training, will remain the key drivers for growing usage of simulators. Technological advances that allow the replication of a wide range of combat scenarios, some of which cannot actually be done in live-training are highlighting the role that simulators increasingly play even in refining concept of operations (CONOPS).

With the procurement of a number of fixed wing and rotary aircraft, the simulator opportunities in the aviation sector have also increased enormously and Zen is evolving indigenous solutions for these needs. We are responding the RFI's floated by the Indian Air Force for various simulators and are very positive about the outcome.

6. How do you intend to stay competitive in such a market? Are you looking to ramp up exports?

We stay very close to the customer to understand its evolving training needs. Having built so many products over the years we have compressed our product development cycle thus providing what the customer really wants- faster, better, and cheaper.
Even though our products are robust we have a very good after sales support team for continuous support. The products that we have sold in India won out against tough foreign competition. And till now we were focused very much on India, but that will change. We will start looking overseas more than we have in the past. With the Govt of India very keen to encourage Indian companies to export, we hope that export procedures will be streamlined, which in turn will give us a big boost.

MoD should ensure that export permissions are granted within a limited time-frame and in a very transparent manner. This will help companies that have developed world class equipment to foray into exports. Also, like many other countries, our foreign embassies should be tasked with promoting Indian defence equipment in their respective countries including keeping a tab on products designed and developed in India and potential demand for the same in international markets.

For updates follow Saurav Jha on twitter @SJha1618. Send your feedback to geekatlarge1618@gmail.com

First Published: March 9, 2015, 11:02 PM IST

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